Global CPO Prices Rise, Palm Farmers' TBS Prices Plummet

JAKARTA - Deputy Agriculture Minister Sudaryono, known as Mas Dar, stated that global crude palm oil (CPO) prices are diverging from domestic palm prices. Mas Dar made the remarks following a meeting with palm farmers’ associations, palm oil processing mills, and exporters. He said global CPO prices are rising due to increased demand, but fresh fruit bunch (TBS) prices for farmers have plummeted. ‘Global palm oil prices, including at the consumer level, have not decreased in either price or quantity. In fact, demand and prices are rising,’ Mas Dar said at his Jakarta office on Friday, 29 May 2026. Meanwhile, TBS prices have plummeted. For company-linked farmers, TBS is priced at around Rp 600 per kilogram, while independent farmers face prices of Rp 1,800 per kilogram. The domestic TBS price drop followed the government’s announcement of establishing PT Danantara Sumberdaya Indonesia (DSI) as the sole palm oil exporter. Mas Dar previously attributed the issue to market psychology being shaken following the new policy announcement. However, the government has clarified that DSI’s establishment will not impose additional levies on exporters. DSI was formed to ensure export activities are not abused. Mas Dar stated the objective of establishing DSI is to prevent under-invoicing and transfer pricing in the export of strategic commodities. ‘Businesses operating legitimately should not be affected by DSI’s establishment; there should be no changes for those not involved in malpractice,’ Mas Dar said. Refineries and exporters have been urged to continue business as usual as global CPO prices rise. ‘Business operators, particularly downstream entities such as refineries and exporters, should conduct transactions based on KPBN price benchmarks and avoid disrupting fair price formation,’ he added.